MESSAGE: Rights holders in the media industry that
are victims of piracy should therefore consider enforcing their rights before
the Federal Court of Appeal, which demonstrates an understanding of the piracy
ecosystem and which can issue remedies when the infringer can be identified and
is located in Canada.IntroductionOn
February 20 2018 the Federal Court of Appeal issued its judgment in Bell Canada v Lackman,(1)declaring that an interim injunction
authorising the shutdown and seizure of piracy websites and an Anton Piller
order were legal and had been properly executed. The court also granted an
interlocutory injunction that will remain valid until the trial against the
owner and operator of these websites, which had hosted and distributed a number
of add-ons for the popular Kodi media player. The court noted that these add-ons
had been "clearly designed to facilitate access to infringing
material" and could not benefit from the "merely a conduit"
exception to infringement.FactsThe
appellants – part of the Bell, Rogers and Québecor media groups – were
broadcasters and broadcast distribution undertakings that owned and
retransmitted television programming in Canada.The
respondent, Adam Lackman, owned and operated the TVAddons website, through
which he promoted and distributed a large number of add-on applications for the
Kodi media player, including add-ons that were specifically configured to
provide users with unauthorised access to a vast amount of television
programming owned and distributed by the appellants.Given
the infringing nature of TVAddons and the respondent's known past illegal
activities, the appellants sought and obtained an ex parte interim
injunction and Anton Piller order before Justice LeBlanc on June 9 2017. The
interim injunction restrained the respondent from further engaging in the
operation of the TVAddons website and, notably, authorised bailiffs and
computer technicians to shut down and take custody of the TVAddons servers and
domain names to ensure that they would not be transferred outside the court's
jurisdiction. The Anton Piller order authorised:• the bailiffs to seize or make
copies of relevant evidence; and• the appellants' solicitors to
question the respondent on topics relating to the operation of TVAddons.On June
21 2017, after the execution of these interim orders, the appellants brought a
motion before Justice Bell for a declaration that the execution was lawfully
conducted and to convert the interim injunction into an interlocutory
injunction. In his June 30 2017 judgment,(2) Justice Bell reviewed the
appellants' case de
novo and held that their evidence did not support a
strong prima facie case
of infringement against the respondent, thus failing at the first prong of the
Anton Pillertest.Specifically,
he found that the add-ons hosted and distributed by the respondent were akin to
"mini Google" search engines and that, as such, they could benefit
from the conduit exception to infringement provided in Section 2.4(1)(b) of the
Copyright Act. He also held that issuing an injunction would cause the
respondent undue financial harm.Justice
Bell therefore dismissed the appellants' motion in its entirety by:• revoking the Anton Piller order
and the interim injunction order; and• ordering the TVAddons online
assets and all articles seized or copied during the execution of the June
9 2017 order to be returned to the respondent.

Urgent stay pending appealDue to
the risk that control over the relevant websites and servers could easily be
taken out of the court's jurisdiction and that crucial electronic evidence
could be destroyed or hidden, the appellants urgently requested a stay from the
Federal Court of Appeal immediately following the July 2 2017 decision, the
Sunday of a holiday weekend. Later that day, Justice Stratas granted an interim
stay of the June 30 2017 order – which he then renewed until the Federal Court
of Appeal could hear a formal motion – noting that he had been persuaded that
the appellants had an arguable case on appeal. Within two weeks, Justice Scott
granted a formal stay pending appeal.(3)Federal Court of Appeal decisionThe
Federal Court of Appeal held that Justice Bell's conclusions were based on:

a misapprehension of case law
and the Copyright Act; and

overriding and palpable errors
in construing the evidence.

The
court therefore:

set aside the entirety of
Justice Bell's order;

declared that the interim
injunction and the Anton Piller order had been lawfully executed; and

issued the interlocutory
injunction sought by the appellants.

On the
issue of the Anton Piller order, the Federal Court of Appeal first concluded
that Justice Bell had misconstrued the respondent's activities in holding that
the add-ons distributed by TVAddons were akin to a mini Google search engine
and noted the important difference between:

an indiscriminate search engine,
such as Google; and

infringing add-ons, which are
designed to target predetermined content in a manner that is both user
friendly and reliable.

The
court therefore held that:

the appellants had presented a
clearly strong prima facie case of
infringement of their exclusive right to make their programming available
to the public by telecommunication; and

the respondent could not
benefit from the Section 2.4(1)(b) conduit exception and "cloak
himself in the shroud of an innocent disseminator, when his website
clearly targets those who want to circumvent the legal means of watching
television programs and the related costs".

The
court then held that Justice Bell "would have had no choice but to find
that the appellants met all the [other] criteria for the issuance of an Anton
Piller order" – namely, the risk that:

they would suffer serious harm;

the respondent possessed
incriminating evidence; and

evidence would be destroyed.

On
these points, the court held that Justice Bell should have considered the
respondent's history of satellite television signal piracy and the sale of
jail-broken set-top boxes. The court also found that some aspects of the
respondent's untrustworthy character were relevant, including the fact that he
had previously been found guilty of lying to a police officer and had attempted
to conceal crucial evidence and lied to the independent solicitors during the
execution of the interim order.

Finally,
because of the clearly infringing nature of TVAddons and the lack of evidence
regarding the respondent's alleged lack of financial resources – which was
partly due to the fact that the respondent had gone to great lengths to conceal
his identity and had operated TVAddons through offshore businesses and bank
accounts – the court found that Justice Bell's findings were fatally flawed and
that an interlocutory injunction should be issued.

Notably,
the court also held that because online assets such as websites can easily be
moved and reactivated elsewhere, it was justified for the appellants to seek,
obtain and execute an interim injunction that authorised computer technicians
to completely shut down the TVAddons websites, servers and social media and
transfer them to the custody of bailiffs.

Comment

This
decision confirms that the Federal Court of Appeal will issue extraordinary
remedies to curb the effects of media piracy and that these remedies are
flexible and can include website shutdowns and transfers when necessary.

The
Federal Court of Appeal has acknowledged the harm that results from the
dissemination of software that provides unauthorised access to infringing
content and had already issued an interlocutory injunction against retailers of
set-top boxes loaded with such software (for further details please see "Injunction against retailers of set-top boxes loaded with
infringing applications"). In its February 20 2018 decision,
the court confirmed that offering the same service through a website is also
punishable because:

"the
means through which access is provided to infringing content is different (one
relied on hardware, while the other relied on a website), but they both
provided unauthorised access to copyrighted material without authorisation of
the copyright owners."

As
such, the court held that "there is no principled reason to distinguish
one from the other".

Rights
holders in the media industry that are victims of piracy should therefore
consider enforcing their rights before the Federal Court of Appeal, which
demonstrates an understanding of the piracy ecosystem and which can issue
remedies when the infringer can be identified and is located in Canada.